Financing Longevity:Pooled Pension Plans

At the October 2010 Retirement Planning Association of Canada (RPAC) conference I co-chaired in Toronto, the agenda was centered around Reframing Retirement & Longevity Issues in 21st Century Canada. Of course one of the main streams of conversation was financial planning or “financing longevity” as I prefer to call it.

Robert Brown, who was Professor of Actuarial Science at University of Waterloo, spoke at that conference about economic security for an aging population. He spoke broadly about the issue, but part of that security is wrapped in the portfolio of financial options designed to support our longevity – our “money pool” for later life so to speak.

A year later since his well crafted big picture presentation, Mr. Brown recently spoke to a little publicly known Canadian pension reform strategy item called “pooled pension plans”. What’s with that? To quote from his Sept. 19th article in www.evidencenetwork.ca

“government would approve the creation of some very large asset pools or funds. Anyone could join one of these asset pools: small- to medium-sized employers, individuals, the self-employed, creating what is called a co-mingled fund. The assets would then be managed as a large pension plan would be. These asset pools would be very large, expected to exceed $10 billion.”

Government hasn’t legislated this pension vehicle to date, but considering demographics and the longevity factors at play in Canada this option should get more press and educational background to help us construct our financial portfolio. Not just for Boomers but for generations to follow.